Creative Edge Nutrit Corporate Bonds and Leverage Analysis
FITX Stock | USD 0.00001 0.00 0.00% |
At this time, Creative Edge's Short and Long Term Debt is fairly stable compared to the past year. Short Term Debt is likely to rise to about 13.9 M in 2024, whereas Debt To Equity is likely to drop (1.08) in 2024. With a high degree of financial leverage come high-interest payments, which usually reduce Creative Edge's Earnings Per Share (EPS).
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.19 | Current Value 0.17 | Quarterly Volatility 0.01102771 |
Creative |
Given the importance of Creative Edge's capital structure, the first step in the capital decision process is for the management of Creative Edge to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Creative Edge Nutrit to issue bonds at a reasonable cost.
Creative Edge Bond Ratings
Creative Edge Nutrit financial ratings play a critical role in determining how much Creative Edge have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Creative Edge's borrowing costs.Piotroski F Score | 2 | Frail | View |
Beneish M Score | (4.03) | Unlikely Manipulator | View |
Creative Edge Nutrit Debt to Cash Allocation
As Creative Edge Nutrit follows its natural business cycle, the capital allocation decisions will not magically go away. Creative Edge's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Creative Edge Nutrit currently holds 11.49 M in liabilities. Creative Edge Nutrit has a current ratio of 0.69, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Note, when we think about Creative Edge's use of debt, we should always consider it together with its cash and equity.Creative Edge Total Assets Over Time
Creative Edge Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Creative Edge uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Creative Edge Debt Ratio | 17.0 |
Creative Edge Corporate Bonds Issued
Creative Short Long Term Debt
Short Long Term Debt |
|
Understaning Creative Edge Use of Financial Leverage
Understanding the structure of Creative Edge's debt obligations provides insight if it is worth investing in it. Financial leverage can amplify the potential profits to Creative Edge's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its cost of debt.
Last Reported | Projected for Next Year | ||
Short and Long Term Debt | 13.2 M | 13.9 M | |
Short Term Debt | 13.2 M | 13.9 M | |
Net Debt To EBITDA | 0.01 | 0.01 | |
Debt To Equity | (1.03) | (1.08) | |
Debt To Assets | 0.19 | 0.17 | |
Total Debt To Capitalization | 7.17 | 6.37 | |
Debt Equity Ratio | (1.03) | (1.08) | |
Debt Ratio | 0.19 | 0.17 | |
Cash Flow To Debt Ratio | 0.27 | 0.24 |
Also Currently Popular
Analyzing currently trending equities could be an opportunity to develop a better portfolio based on different market momentums that they can trigger. Utilizing the top trending stocks is also useful when creating a market-neutral strategy or pair trading technique involving a short or a long position in a currently trending equity.Additional Tools for Creative Stock Analysis
When running Creative Edge's price analysis, check to measure Creative Edge's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Creative Edge is operating at the current time. Most of Creative Edge's value examination focuses on studying past and present price action to predict the probability of Creative Edge's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Creative Edge's price. Additionally, you may evaluate how the addition of Creative Edge to your portfolios can decrease your overall portfolio volatility.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.